Spain is hailed as a market of opportunities at MIPIM 2016
The most important real estate fair in the world, MIPIM 2016, is the best showcase for the projects of which the Spanish market recovery is taking advantage. After a historic year for real estate investment in Spain, the trust and favorable economic outlook have transformed Spain into a market of opportunities where international investors seek assets in order to invest eight billion euros.
Once more, the Palais des Festivals de Cannes in France will host from March 15-18 the largest real estate fair in the world, MIPIM 2016. For four days, the 19,000 square meters of exhibition space, will be a forum for the more than 21,400 professionals coming from 89 counties with all types of real estate projects in search of opportunities. Around 2400 companies and 4800 investors will be present in Cannes at what is a major international event to do real estate business .
Around twenty Spanish firms will also present their projects and services at MIPIM 2016. In addition, more than 200 representatives of companies and professionals from the Spanish real estate sector will attend the French fair in order to sell, purchase, seek financing, make contacts and find out first-hand the trends of the world real estate forecast. Companies and real estate consultancies, law firms and architecture studios and Spanish public administrations will present the best of their portfolios at this showcase for the international real estate sector.
Approximately twenty Spanish firms will present their projects and services at MIPIM 2016
The rise of the real estate business, which Spain has been experiencing recently, is a good support for these initiatives. In 2015, Spain confirmed its recovery and became one of the most active European counties for investment. According to the CBRE, investment in the Spanish real estate market placed it in a record position, reaching 13 billion Euros, 25% more than in 2014 and triple than in 2013.
Recovery and Consolidation
The improvement of the economy and recovery of trust underlie these figures according to analysts who also emphasize the investment activity that international funds and Socimis, Spanish real estate investment trusts (REIT) are performing. A trend that changes the manner of investing in Spain: movement away from opportunist investment to core operations with greater a greater vision.
International investors positively value the evolution of the Spanish market. “Spain is seen as a market with great potential” indicated recently Julien Sausset, the 2016 MIPIM Director, during a conference held in Madrid on the Spanish real estate market. Sausset emphasized at this forum that Spain has “a very good image abroad, much better that than which Spaniards have themselves.” It should not be overlooked that the Spanish GNP grew last year by 3.2% placing it at the top of the EU in terms of economic growth. In addition, although unemployment continues to be a major problem, with a rate of 20.9%, 500,000 jobs were created in 2015, domestic consumption closed the year with an increase of 3.2 % and the trust of Spanish consumers reached maximum levels at the end of the last year.
The Spanish real estate sector has also expressed moderate optimism at various forums. At MIPIM, the feeling of Spanish real estate at the Spanish Conference, which fair representatives have organized in Spain on the 17th, may be determined. In general, among professions the political uncertainty is a concern, although the market expects that in 2016 the positive trends of recent years will be consolidated.
The report entitled “Trends” produced by the CBRE reveals that the Spanish real estate sector considers that the adjustment of the housing sector has concluded and expects that in 2016 momentum will occur in this segment with rising prices and a spike in promotion. 40% of Spanish professionals see housing as a market with “high potential”, something unthinkable during the crisis.
40% of professionals view property in Spain as a market with “high potential”
Nevertheless, offices continue being the principle objective of investors. The office market in Spain had a great year, with contract figures which in Madrid reached 477,969m2, 31% greater in comparison to 2014, and reached 389,000m2 in Barcelona, 41% more according to JLL. Furthermore, it is a sector that experts believe may grow in terms of income by 41%, which has served to attract a volume of investment that hit 5400 billion Euros last year, according to estimates by Aguirre Newman.
Another market earmarked for investment in Spain has been the hotel sector, which in 2015 reached the record amount of 2.650 billion Euros, positioning the Spanish market as the third largest European country in terms of hotel investment after the United Kingdom and Germany according to JLL Hotels & Hospitality Group. Logistics and real estate industrial sector have also been consolidated as an interesting market for investment. Furthermore, if in 2015 profitability fell in almost all sectors it was in the industrial one where this drop was less noticeable with yields that were around 7% in Madrid and Barcelona, as recalled from Cushman & Wakefield. .
On its part, retail assets attracted investments in the amount of 1.7 billion Euros in 2015 in Spain and continue being one of the most attractive for operators and investors. According to Deloitte, currently there are negotiations underway for the sale purchase of real estate assets in the Spanish market for 6 Billion Euros. 58% of these assets are malls and commercial space.
Capital seeks opportunities in Spain
For Deloitte, the investment market continues to be strong and Spain remains on the agenda of the investors who will visit the MIPIM. The consultant estimates that around 8 Billion Euros of international capital is seeking profitable properties in the country with a good location and the potential to increase its income. Nonetheless, the scarcity of assets is generating business opportunities in the area of rehabilitation and transformation of buildings, above all in the commercial sector and in housing at the time that real estate promotion is awakening after years of a standstill.
The Spanish real estate sector closed a record year for investment with a volume of 13 billion Euros.
MIPIM 2016 will be the showcase where Spanish representatives may present in detail this market of opportunities that has opened in Spain after the crisis. The French fair will also serve to emerge oneself in the new trends that are signaling the evolution of the real estate business on an international level. In real estate this is producing a transformation from a product economy to one of services, indicated Julien Sausset, highlighting the appearance of new materials and technological advances for management and real estate sales that may be viewed at this moment at the MIPIM.
Showcase for trends
Innovation and connectivity. Avant-garde architecture and sustainability. These are the trends, which are being applied to the many new projects that are being presented at Cannes and that will be object of analysis at the different MIPIM fórums. The presence of 550 public entities coming from different city projects provides a significant sampling of the new urbanism that is to come. And under the slogan “Housing the World” at MIPIM the future of the residential market will be discussed, a topic in fashion after the investment in housing increased approximately 30% throughout the world in 2015.
MIPIM is the best forum at which to find out the trends that indicate the evolution of the real estate business
At Cannes, we will also be able to see how investment is diversified. There are more and more types of interesting projects in which to invest such as residences, health infrastructures, logistics developments and hotels. In addition, discussion will also address the evolution that offices are experiencing, that is in regard to being transformed throughout the world as environments that encourage collaboration.
On the other hand, MIPIM is a phenomenal showcase for international architecture. The fair is expected to attract around 1500 architects from around the world in order for them to present their work and make contact with new clients among promoters, administrations and investment. In this regard, the MIPIM Prizes 2016 are the best promotion for the most innovative projects. This year 230 projects from 42 countries have been presented to some of the 11 categories of these prizes although only 44 of them have ended up being finalists. On March 17, the large auditorium of the Palais des Festivals will host the awards ceremony where the winners will be decided and will put the finishing touch on a fair that continues being the place which each year brings together the best of international real estate.